Climate: Making Sense and Making Money

Climate change is not the inevitable price of progress, but rather "an unnecessary artifact of the uneconomically wasteful use of resources," according to this influential white paper by Amory Lovins and Hunter Lovins. Many other studies have shown how the United States can reduce its greenhouse-gas emissions while stimulating the economy. This paper offers practical, market-based mechanisms for actually making that happen-without relying on the carbon tax or other "command-and-control" strategies that some economists and politicians fear would harm the economy. This report argues that saving fuel typically costs less than burning fuel, and the gap is widening as efficiency costs continue to fall faster than fuel prices. Engineering economics has made climatic protection not costly but profitable. Therefore, debates about climate science, who should save energy first, and how to
share the alleged pain of the savings are all misconceived and irrelevant. Just as the American economy has succeeded in displacing leaded gasoline, chlorofluorocarbons, sulfur emissions, and many toxic chemicals—all at costs far lower than initially expected—so modern technologies and market understanding can profitably displace carbon fuels too, yielding both a stable climate and a vibrant economy.